U.S. lawmakers at T-Mobile, Sprint hearing spar over stay at Trump hotel

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WASHINGTON (Reuters) - U.S. lawmakers questioning the chief executives of T-Mobile US Inc and Sprint Corp over their planned merger sparred with each other on Tuesday over T-Mobile’s executives staying at President Donald Trump’s hotel where they spent $195,000 while in Washington.

FILE PHOTO: A smartphones with Sprint logo are seen in front of a screen projection of T-mobile logo, in this picture illustration taken April 30, 2018. REUTERS/Dado Ruvic/Illustration

T-Mobile Chief Executive John Legere defended the $26 billion deal before a House subcommittee, saying the company would be better and faster at building 5G, the next generation of wireless, to compete with industry leaders AT&T Inc and Verizon Communications Inc and would create jobs while prices would not rise.

But Representative Hank Johnson, a Democrat from Georgia, asked instead about Legere taking a group of executives to stay at the Trump International Hotel the day after the merger was announced last year. The hotel stay had been previously reported.

“You see how that looks?” Johnson pressed on. “You understand the optics of that? What it looks like? It looks like what’s happening is that T-Mobile is trying to curry favor with the White House.”

Legere said that he was unaware of any contacts between the White House and the Justice Department and Federal Communications Commission who were reviewing the deal.

Representative Pramila Jayapal, a Democrat, agreed with Johnson’s concerns. “It appears that you were trying to influence the merger,” she told Legere.

Republicans on the committee disagreed.

Representative Jim Sensenbrenner, a Republican, said that where the T-Mobile executives stayed was irrelevant. “I’m kind of embarrassed sitting here listening to the line of questioning of the gentleman from Georgia,” he said, referring to Johnson.

Representatives Matt Gaetz and Ken Buck, both Republicans, mocked the hotel issue. “I had dinner at the Trump hotel three weeks ago,” Buck said. “I wonder if I have a conflict of interest?”

Legere said on Twitter on Sunday that on this trip to Washington he stayed at a different hotel.

MERGER CONCERNS

Two key House Democrats expressed concern about the agreement to combine the No. 3 and No. 4 U.S. wireless carriers, which was struck in April.

Representative David Cicilline, chair of the antitrust panel, noted that both companies had competed hard against their bigger rivals. “I am deeply skeptical that consolidation is the path forward to lowering prices, increasing opportunity, or unleashing competition,” he added.

Representative Jerrold Nadler, chair of the full committee, said he was concerned about the companies’ dominance of prepaid plans, usually used by people who are poorer or have bad credit.

“Because the proposed transaction would also consolidate the market for these services, it may have disproportionately negative effects on low-income households,” he said.

To win support for the deal, T-Mobile previously said it would not increase prices for three years. Sprint said it hopes to complete the regulatory approval process by the end of June.

Last month at a congressional hearing, House Democrats raised worries about the deal because the U.S. wireless market has just four main carriers.